FederalDaily.com > Postal Reform Bill Stirs Controversy

FederalDaily - January 27, 2006

Postal Reform Bill Stirs Controversy

The Board of Governors for the U.S. Postal Service (USPS) is publicly opposing the Senate Postal Reform Bill, S. 662, it announced in a letter to Sen. Susan Collins, R-Maine, and the Senate Homeland Security and Governmental Affairs Committee on Tuesday. The board said its primary concerns are that the bill would: force a rate increase, limit flexibility to create revenue, and establish a regulatory commission capable of overriding USPS decisions. “We believe there are critical elements missing from this bill, as well as numerous burdensome provisions that would make it extremely difficult for the Postal Service to function in a modern, competitive environment,” the board stated in the letter. In response, Collins and Sen. Thomas Carper, D-Del., coauthors of the bill, said, “We are extremely troubled and disappointed that at the very last minute, the Postal Service is attempting to block action on our bill.” The senators argued that nothing in the bill would lead to rate increases. “We join the dozens of groups who’ve endorsed S. 662 in urging the Senate to move this process along,” the senators said.

DoD Raises $15.1 Million for CFC

The Department of Defense (DoD) set a contribution record for the Combined Federal Campaign (CFC) raising $15.1 million for 2005, $2.3 million above the department’s goal. Earlier this week, DoD held a ceremony at the Pentagon recognizing the fundraising efforts. “By [making] all of these contributions, you have enabled the Department of Defense to maintain its distinction as the largest single charitable organization in the world,” said Michael B. Donley, director of administration and management for the Office of the Secretary of Defense. DoD’s participation rate for the year was 60 percent, 10 percent higher than the average of other federal agencies.

Army, Marines Save Millions

The Department of Defense (DoD) has announced savings of almost $10 million for the Army and Marines on modular fuel storage and distribution systems over the next four years. The Defense Energy Support Center (DESC) is the primary provider of fuel and other energy products and services to DoD and other federal agencies. In April 2005, a DESC team noticed the Marines were preparing to post a draft request for proposals for a deployable fuel distribution system similar to one the Army had just announced a contract award for. The team recognized an opportunity to cut costs to the military services by combining the purchases under one contract and purchasing similar systems for both services. The Army estimates it will save 2 percent, or $3.7 million, in overall program costs over the life of the contract. The Marines will save roughly 12 percent of their program costs, or an estimated $6.2 million.

FEMA’s Flood Insurance Program Hit Hard

The National Flood Insurance Program (NFIP) is managed by the Federal Emergency Management Agency (FEMA). The program provides property owners with some insurance coverage for flood damage. A new Government Accountability Office (GAO) report said FEMA estimates that Hurricanes Katrina, Rita and Wilma will generate claims and payments of about $23 billion—far surpassing the total claims paid in the entire history of the NFIP. GAO said the NFIP, by design, is not actuarially sound. The program does not collect sufficient premium income to build reserves to meet long-term future expected flood losses. In November 2005, FEMA’s authority to borrow from the Treasury was increased from $1.5 billion to $18.5 billion through fiscal year 2008 to help pay claims from the 2005 hurricane season. GAO said it is highly unlikely that the NFIP as presently funded could generate sufficient revenues to repay a debt of this size.